Ex.17. Answer the following questions.

Date: 2015-10-07; view: 518.

DISCUSSION POINTS

Ex.15. Write a brief summary (25-30 sentences) of Text A.

Ex.14. Write a plan for a summary of Text A.

WRITING

Ex.13. Make a presentation of the topic “Market structure”.

Ex.16. Write an essay (100 – 150 words) about:

- monopoly versus competitive markets;

- the distinctive feature of an oligopoly (interdependence).

1. “A perfectly competitive price that all buyers and sellers take as given is the key link in orchestrating production and consumption in an efficient way.” Do you agree? Explain, why or why not.

2. According to Adam Smith, the pursuit of private gain leads to public benefit. Under what circumstances is this not true?

3. What are some of the pros and cons of government-guaranteed prices for farmers?

4. Which is closer to being a monopoly, American Motors or Rolls Royce? Answer the same question for the producer of pastries in a small town or the producer of the wheat used in it. In each case, explain your answer.

5. Consider the following statement: “Monopolies should be subject to price control. Competitive industries should not. Every owner has a monopoly in the renting of his or her building. Therefore, the government should control rents.” Do you agree in part or in whole with this statement? Explain.

6. If there are only four large firms in your industry, explain why collusion would be in your economic interest as a producer. Explain how consumers of your product would be affected. Describe the problems involved in arranging a collusive agreement and in making it stick. Would the agreement be legal?

7. “In 1985, when the Saudis were operating at less than one third of their oil-production capacity, they could no longer hold oil price up by reducing their supply. However the Saudis were able to keep oil price up by forcing the other OPEC members to restrict their supplies. The Saudis did this by threatening to drive the price lower.” Explain. Could the Saudis really have driven price lower? If not, why? If so, how?

Text B:Rivalry